The Psychology Behind Money Hoarding
How the brain turns cash into an untouchable possession.
Posted August 14, 2025 | Reviewed by Margaret Foley
In a conversation with the person who inspired me to write a post about food hoarding , she talked about her brother, who, she said, is a money hoarder. I was told, “He acts like he has no money .... He has a high IQ , but is not street-smart.”
Her brother may not be alone. According to several reports (Fujiki & Nakashima, 2019; Shirai & Sugandi, 2019), up to 42 percent of the total cash supply in Japan may be held in non-transactional or hoarded form. Though this is Japan and not the U.S., it suggests that money hoarding is alive and well, and it's probably worldwide.
The Behavioral Components of Money Hoarding
At the behavioral level, money hoarding spans a spectrum. At one level, conservative saving, retirement accounts, and emergency funds are adaptive. For example, a 35-year-old teacher automatically deposits 10 percent of each paycheck into a 401(k) retirement account and also keeps three months’ worth of living expenses in a high-yield savings account for emergencies. That money is earning interest, and it’s available for unexpected expenses.
Money hoarding, on the other hand, is not adaptive but maladaptive. This is when money is intentionally or habitually removed from productive circulation. It may be treated like a symbolic buffer rather than a tool (Thaler, 1999). For example, a business owner keeps tens of thousands of dollars in physical cash locked away rather than investing it in his company or buying interest-bearing assets. The money isn’t earning returns, creating jobs, or funding innovation ; it’s just sitting to provide psychological comfort, a kind of “security blanket” against imagined worst-case scenarios.
Neuropsychology helps us understand why this happens: Money is a secondary reward that piggybacks on primitive brain systems evolved to respond to primary rewards (food, shelter, social resources). Those systems—principally the dopaminergic midbrain and its projection sites—encode salience and motivational pull and can bias choices in favor of accumulation or immediate reward depending on context (McClure, Laibson, Loewenstein & Cohen, 2004; Frydman & Camerer, 2016).
Two themes are especially useful for understanding money hoarding: (1) decision-making deficits and affective dysregulation, and (2) mental accounting and reward-valuation biases. Clinical and imaging studies of hoarding disorder show altered function in the anterior cingulate cortex (ACC), insula, and prefrontal regions during decisions about possessions, areas tied to emotion , interoception, and cognitive control (Tolin et al., 2012). When people evaluate whether to keep or discard an item, hoarders show exaggerated insula/ACC responses to personally meaningful stimuli and reduced regulatory engagement when evaluating nonpersonal items. Translated to money, similar processes could make certain funds feel uniquely “mine” or imbued with special meaning, producing emotional responses that trump utilitarian cost-benefit reasoning (Tolin et al., 2012; Saxena, 2008).
Neuroeconomic Contributors
Our brains don’t treat all rewards the same way. Neuroeconomic research shows that one set of brain regions, the limbic and paralimbic areas, lights up when we get something right away, while another set, the lateral prefrontal and parietal regions, helps us plan and think about the future (McClure et al., 2004). When it comes to money hoarding, this split can lead to two common patterns. First, some people purposely lock money away to avoid the temptation of spending it too quickly. This self-control strategy works, but it also means the money isn’t available for other needs in the short term (McClure et al., 2004). Second, wealthy individuals may keep large sums sitting idle because their brains value control, safety, or avoiding loss more than the possible gains from investing or spending, a behavior that can slow the economy in the same way indecision slows personal spending (Frydman & Camerer, 2016). Mental accounting—our habit of assigning different purposes or “labels” to different pools of money—can make this worse (Thaler, 1999). A “rainy day” fund, for example, can feel untouchable even when using it might solve urgent problems.
Importantly, contemporary research reframes hoarding not as a moral failing but as the outcome of interacting vulnerabilities. These include genetic predispositions, altered neural responses to reward and loss, cognitive deficits in decision-making and categorization, and emotional attachments that imbue objects or money with safety (Frost & Hartl, 1996; Tolin, 2023).
Fujiki, H., & Nakashima, K. (2019, March). Cash usage trends in Japan: Evidence using aggregate and household survey data (TCER Working Paper Series: E-131). Available at SSRN: https://ssrn.com/abstract=3351429 or http://dx.doi.org/10.2139/ssrn.3351429 .
Thaler, R. H. (1999). Mental accounting matters. Journal of Behavioral Decision Making, 12(3), 183–206.
McClure, S. M., Laibson, D. I., Loewenstein, G., & Cohen, J. D. (2004). Separate neural systems value immediate and delayed monetary rewards. Science, 306(5695), 503–507. https://doi.org/10.1126/science.1100907
Frydman C, Camerer CF. The Psychology and Neuroscience of Financial Decision Making. Trends Cogn Sci. 2016 Sep;20(9):661-675. doi: 10.1016/j.tics.2016.07.003. Epub 2016 Aug 5. PMID: 27499348.
David F. Tolin, Michael C. Stevens, Andrea Nave, Anna L. Villavicencio, Samantha Morrison (2012). Neural mechanisms of cognitive behavioral therapy response in Hoarding Disorder: A pilot study, Journal of Obsessive-Compulsive and Related Disorders, Volume 1, Issue 3, Pages 180-188, ISSN 2211-3649, https://doi.org/10.1016/j.jocrd.2012.04.001 .
Saxena, S. (2008). Neurobiology and treatment of compulsive hoarding. CNS Spectrums, 13(9 Suppl 14), 29–36. https://doi.org/10.1017/S1092852900026912
Frost, R. O., & Hartl, T. L. (1996). A cognitive-behavioral model of compulsive hoarding. Behaviour Research and Therapy, 34(4), 341–350.
Tolin DF, Levy HC, Hallion LS, Wootton BM, Jaccard J, Diefenbach GJ, Stevens MC. Changes in neural activity following a randomized trial of cognitive behavioral therapy for hoarding disorder. J Consult Clin Psychol. 2023 Apr;91(4):242-250. doi: 10.1037/ccp0000804. Epub 2023 Mar 6. PMID: 36877480; PMCID: PMC10175200.
Shirai, S., & Sugandi, E. A. (2019). We’re living in the digital age, but people are still hoarding their cash amidst safety concerns . World Economic Forum, Oct. 17. weforum.org/agenda/2019/10/people-are-still-hoarding-their-cash-amid-safety-concerns/
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Shirley M. Mueller, M.D., is a neuroscientist board certified in neurology and psychiatry. She is also an avid collector. Combining these two disciplines, she wrote Inside the Head of a Collector: Neuropsychological Forces at Play.
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